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There is a strange duality in the world of brick and mortar tech stores today. In the last four years CompUSA, Borders, and Circuit City all went out of business. Many expect Best Buy to follow in the near future. At the same time, Apple has opened over 300 retail outlets worldwide. And recent reports indicate that Microsoft, Amazon, and Google plan to follow Apple’s lead.
The new Google store, which Bloomberg reported on yesterday, will be a relatively small affair outside its European headquarters in Dublin. Like Amazon, which has plans for a small Seattle shop, the search giant is trying to make it clear that it’s simply dipping its toes in the water. “We’ve not made any decisions, it’s simply a planning application,” Google told Bloomberg by email in its typical engineer speak.
When Apple launched its first retail stores back in 2001, as MacWorld notes, there were plenty of doubters. “I give them two years before they’re turning out the lights on a very painful and expensive mistake,” quipped one executive in BusinessWeek. Arne Alsin of Alsin Capital Management said in an article for TheStreet.com, “It’s desperation time in Cupertino, Calif.,” and, “this move is fraught with problems.”
These days, of course, Apple’s retail stores are credited with helping to drive the rabid adoption of its smartphones and tablets, boosting its profits to historic highs. But for the first two years, the company posted a loss on its retail division. And this was during a time when Apple didn’t have the mountain of cash it does today to backstop losses.
But like many of the Apple projects led by Steve Jobs, Apple never doubted itself or made excuses for its foray into retail. And that’s the thing that stands out about the recent moves by Amazon and Google; they lack commitment and ambition. Instead of the flashy glass temples that Apple erected to woo luxury consumers, Amazon and Google are planning small, tentative outposts.
Microsoft is the one company with a big stake in the future of phones and tablets that seems willing to open stores. But it too is avoiding any flagships in major cities, preferring to roll out small efforts in regional malls.
As consumer electronic shops and bookstores (remember those?) become a thing of the past, Amazon, Microsoft, and Google should follow Apple into the retail business with a bold hand. Otherwise, their forays are doomed to fail.